What can the UK teach New York about offshore wind?

New York's recently published offshore wind master plan shows that it is looking to follow lessons learnt in the UK.

Topics
No items found.
Richard Heap
February 7, 2018
This content is from our archive. Some formatting or links may be broken.
This content is from our archive. Some formatting or links may be broken.
What can the UK teach New York about offshore wind?

New York’s offshore wind masterplan shows that it is looking to follow lessons learnt in the UK. [Note: This is an extended and updated version of a Wind Watch article originally published in our weekly North American edition on 1st February 2018.]

We've recently released a complimentary ebook on North American wind: 5 Lessons on the North American Wind Business. Click here to download it.

160417 MHI Vestas Aerial-13430.jpg

New York or London: which is better? It’s a thorny debate that exercises some of those with a strong connection to either city. In reality, though, there is more to connect these two cities than divide them.

And, last week, it became clear that policymakers in New York are seeing what they can learn from their counterparts in London as they seek to grow in offshore wind.

You can’t have missed the announcement. Last Monday, New York Governor Andrew Cuomo launched a masterplan detailing how the state could support the construction of 2.4GW of offshore wind farms in its waters by 2030.

In the process, he wants to build an offshore wind industry in New York State that would generate investment of $6bn and support 5,000 jobs within the next ten years; and help the state to raise the proportion of electricity it gets from renewables to 50% by 2030.

Not to be outdone, New Jersey governor Phil Murphy last week signed an order to accelerate development of 3.5GW of wind farms in its waters by 2030.

And there are ambitious plans from other eastern US states too. Massachusetts has a goal for 1.6GW of offshore wind capacity; Maryland has committed to two projects of around 368MW; and Connecticut is looking for 200MW according to a request for proposals this week.

That means there are now 8GW of offshore wind farms planned off the east coast – and, with its detailed plan, New York is well-positioned to lead the way.

There is a lot of work that has gone into New York's plan. It is the result of two years’ research by New York State Energy Research & Development Authority, which has carried out 20 studies on the environmental, social and other impacts of its plan. And, crucially, it is looking at how best to procure and financially support schemes.

This is where New York’s policymakers are looking closely at their counterparts in London – or, more precisely, those in the UK civil service. It turns out NYSERDA is strongly considering pursuing a system of backing offshore wind farms that is similar to the UK’s.

That information is contained in a separate document, ‘Offshore Wind Policy Options Paper’, which runs to 117 pages and so, naturally, only select bits featured in the full masterplan.

However, it goes into a lot of interesting detail on how New York State is looking to procure offshore wind farms and transmission links, and the role the New York Green Bank can play in backing the industry in its early growth stages.

NYSERDA has rightly identified that one of the early challenges for growing a successful offshore wind sector is how to encourage investors to back projects that cost more up front than other clean energy projects; and where a supply chain is still in its infancy. This is why it is considering seven possible procurement options.

We won’t go into detail on all of these options here. They are set out in detail on pages 23 to 43 of that supporting paper.

But it is worth noting that the option NYSERDA is most positive about at this stage is called Index OREC [Ocean Renewable Energy Credit], which would be similar to the UK’s Contracts for Difference. It “draws on the renewables procurement structure introduced in the United Kingdom,” the document says.

Importantly, it is the only option in which NYSERDA sees no major downsides. This system offers limited implementation challenges; significant hedging benefits; low cost of finance; and benefits that would support local ratepayers. It isn’t a final decision, of course, but it is a good indication of the direction New York is going.

The options paper also looks at transmission. Again, it seems that New York favours a system where transmission links are developed in tandem with the wind farm, by the same firms. The developer could then hold onto the link and operate it; or could sell it on to a third-party operator, which would be similar to the UK’s Offshore Transmission Owner [OFTO] regime.

Finally, it said that the New York Green Bank could play a vital role in supporting the commercialisation of offshore wind. The parallel with the role played by the UK Green Investment Bank, now owned by Macquarie and called Green Investment Group, is clear. The NY Green Bank is in a great position to support projects on commercial terms while private rivals get comfortable with the risks of investing in this fledgling sector.

On the financial side, the UK GIB played an important role in the commercialisation of the offshore wind sector, and so it makes sense for New York – and the US more widely – to look at how offshore wind has been done in the UK. This doesn’t mean the UK’s approach is perfect, and we wouldn’t advocate slavishly following it. These things can always be challenged and improved upon.

That said, the approach has worked, and has helped the UK become the world’s biggest offshore wind market.

New statistics from WindEurope this week reinforced the UK’s leadership position. A record 3.1GW of offshore wind capacity was installed in European waters in 2017 across 17 wind farms, of which 1.7GW was in British waters. This put the UK ahead of Germany, where projects totalling under 1.3GW were completed in its waters.

This means there are 31 wind farms totalling 6.8GW in UK waters with a combined 1,753 turbines, which puts the UK ahead of Germany on 5.4GW in 23 projects with 1,169 turbines. Denmark, the Netherlands, Belgium and Sweden are the other European nations with over 100MW of offshore wind capacity installed.

And the UK could reach total offshore wind capacity of between 18GW and 30GW by 2030, with 14GW-20GW in German waters and 4.5GW-18.5GW in Dutch waters.

By contrast, Bloomberg New Energy Finance has estimated that the US will have 3GW-4GW of offshore wind farms in its waters by 2030. This reflects the challenges with getting procurement and transmission processes up and running; and building a reliable supply chain. The controversial Jones Act could also stifle development.

Still, we wouldn’t be surprised if that 4GW by 2030 figure is conservative. If the US is serious about offshore wind then we would expect it to grow strongly. There is no shortage of interest from major European offshore players such as Iberdrola, Orsted and Statoil; and major investors such as Copenhagen Infrastructure Partners.

Now states need plans that can capitalise on this interest – and, with New York’s masterplan, we can see that it is looking to build a strong base so it can procure 800MW of offshore wind farms in 2018 and 2019; and it plans to start its first request for tenders this year.

If it takes experience from London to help put this in place, so much the better – even if it means our colleagues this side of the Atlantic get a few bragging rights.

New York’s offshore wind masterplan shows that it is looking to follow lessons learnt in the UK. [Note: This is an extended and updated version of a Wind Watch article originally published in our weekly North American edition on 1st February 2018.]

We've recently released a complimentary ebook on North American wind: 5 Lessons on the North American Wind Business. Click here to download it.

160417 MHI Vestas Aerial-13430.jpg

New York or London: which is better? It’s a thorny debate that exercises some of those with a strong connection to either city. In reality, though, there is more to connect these two cities than divide them.

And, last week, it became clear that policymakers in New York are seeing what they can learn from their counterparts in London as they seek to grow in offshore wind.

You can’t have missed the announcement. Last Monday, New York Governor Andrew Cuomo launched a masterplan detailing how the state could support the construction of 2.4GW of offshore wind farms in its waters by 2030.

In the process, he wants to build an offshore wind industry in New York State that would generate investment of $6bn and support 5,000 jobs within the next ten years; and help the state to raise the proportion of electricity it gets from renewables to 50% by 2030.

Not to be outdone, New Jersey governor Phil Murphy last week signed an order to accelerate development of 3.5GW of wind farms in its waters by 2030.

And there are ambitious plans from other eastern US states too. Massachusetts has a goal for 1.6GW of offshore wind capacity; Maryland has committed to two projects of around 368MW; and Connecticut is looking for 200MW according to a request for proposals this week.

That means there are now 8GW of offshore wind farms planned off the east coast – and, with its detailed plan, New York is well-positioned to lead the way.

There is a lot of work that has gone into New York's plan. It is the result of two years’ research by New York State Energy Research & Development Authority, which has carried out 20 studies on the environmental, social and other impacts of its plan. And, crucially, it is looking at how best to procure and financially support schemes.

This is where New York’s policymakers are looking closely at their counterparts in London – or, more precisely, those in the UK civil service. It turns out NYSERDA is strongly considering pursuing a system of backing offshore wind farms that is similar to the UK’s.

That information is contained in a separate document, ‘Offshore Wind Policy Options Paper’, which runs to 117 pages and so, naturally, only select bits featured in the full masterplan.

However, it goes into a lot of interesting detail on how New York State is looking to procure offshore wind farms and transmission links, and the role the New York Green Bank can play in backing the industry in its early growth stages.

NYSERDA has rightly identified that one of the early challenges for growing a successful offshore wind sector is how to encourage investors to back projects that cost more up front than other clean energy projects; and where a supply chain is still in its infancy. This is why it is considering seven possible procurement options.

We won’t go into detail on all of these options here. They are set out in detail on pages 23 to 43 of that supporting paper.

But it is worth noting that the option NYSERDA is most positive about at this stage is called Index OREC [Ocean Renewable Energy Credit], which would be similar to the UK’s Contracts for Difference. It “draws on the renewables procurement structure introduced in the United Kingdom,” the document says.

Importantly, it is the only option in which NYSERDA sees no major downsides. This system offers limited implementation challenges; significant hedging benefits; low cost of finance; and benefits that would support local ratepayers. It isn’t a final decision, of course, but it is a good indication of the direction New York is going.

The options paper also looks at transmission. Again, it seems that New York favours a system where transmission links are developed in tandem with the wind farm, by the same firms. The developer could then hold onto the link and operate it; or could sell it on to a third-party operator, which would be similar to the UK’s Offshore Transmission Owner [OFTO] regime.

Finally, it said that the New York Green Bank could play a vital role in supporting the commercialisation of offshore wind. The parallel with the role played by the UK Green Investment Bank, now owned by Macquarie and called Green Investment Group, is clear. The NY Green Bank is in a great position to support projects on commercial terms while private rivals get comfortable with the risks of investing in this fledgling sector.

On the financial side, the UK GIB played an important role in the commercialisation of the offshore wind sector, and so it makes sense for New York – and the US more widely – to look at how offshore wind has been done in the UK. This doesn’t mean the UK’s approach is perfect, and we wouldn’t advocate slavishly following it. These things can always be challenged and improved upon.

That said, the approach has worked, and has helped the UK become the world’s biggest offshore wind market.

New statistics from WindEurope this week reinforced the UK’s leadership position. A record 3.1GW of offshore wind capacity was installed in European waters in 2017 across 17 wind farms, of which 1.7GW was in British waters. This put the UK ahead of Germany, where projects totalling under 1.3GW were completed in its waters.

This means there are 31 wind farms totalling 6.8GW in UK waters with a combined 1,753 turbines, which puts the UK ahead of Germany on 5.4GW in 23 projects with 1,169 turbines. Denmark, the Netherlands, Belgium and Sweden are the other European nations with over 100MW of offshore wind capacity installed.

And the UK could reach total offshore wind capacity of between 18GW and 30GW by 2030, with 14GW-20GW in German waters and 4.5GW-18.5GW in Dutch waters.

By contrast, Bloomberg New Energy Finance has estimated that the US will have 3GW-4GW of offshore wind farms in its waters by 2030. This reflects the challenges with getting procurement and transmission processes up and running; and building a reliable supply chain. The controversial Jones Act could also stifle development.

Still, we wouldn’t be surprised if that 4GW by 2030 figure is conservative. If the US is serious about offshore wind then we would expect it to grow strongly. There is no shortage of interest from major European offshore players such as Iberdrola, Orsted and Statoil; and major investors such as Copenhagen Infrastructure Partners.

Now states need plans that can capitalise on this interest – and, with New York’s masterplan, we can see that it is looking to build a strong base so it can procure 800MW of offshore wind farms in 2018 and 2019; and it plans to start its first request for tenders this year.

If it takes experience from London to help put this in place, so much the better – even if it means our colleagues this side of the Atlantic get a few bragging rights.

New York’s offshore wind masterplan shows that it is looking to follow lessons learnt in the UK. [Note: This is an extended and updated version of a Wind Watch article originally published in our weekly North American edition on 1st February 2018.]

We've recently released a complimentary ebook on North American wind: 5 Lessons on the North American Wind Business. Click here to download it.

160417 MHI Vestas Aerial-13430.jpg

New York or London: which is better? It’s a thorny debate that exercises some of those with a strong connection to either city. In reality, though, there is more to connect these two cities than divide them.

And, last week, it became clear that policymakers in New York are seeing what they can learn from their counterparts in London as they seek to grow in offshore wind.

You can’t have missed the announcement. Last Monday, New York Governor Andrew Cuomo launched a masterplan detailing how the state could support the construction of 2.4GW of offshore wind farms in its waters by 2030.

In the process, he wants to build an offshore wind industry in New York State that would generate investment of $6bn and support 5,000 jobs within the next ten years; and help the state to raise the proportion of electricity it gets from renewables to 50% by 2030.

Not to be outdone, New Jersey governor Phil Murphy last week signed an order to accelerate development of 3.5GW of wind farms in its waters by 2030.

And there are ambitious plans from other eastern US states too. Massachusetts has a goal for 1.6GW of offshore wind capacity; Maryland has committed to two projects of around 368MW; and Connecticut is looking for 200MW according to a request for proposals this week.

That means there are now 8GW of offshore wind farms planned off the east coast – and, with its detailed plan, New York is well-positioned to lead the way.

There is a lot of work that has gone into New York's plan. It is the result of two years’ research by New York State Energy Research & Development Authority, which has carried out 20 studies on the environmental, social and other impacts of its plan. And, crucially, it is looking at how best to procure and financially support schemes.

This is where New York’s policymakers are looking closely at their counterparts in London – or, more precisely, those in the UK civil service. It turns out NYSERDA is strongly considering pursuing a system of backing offshore wind farms that is similar to the UK’s.

That information is contained in a separate document, ‘Offshore Wind Policy Options Paper’, which runs to 117 pages and so, naturally, only select bits featured in the full masterplan.

However, it goes into a lot of interesting detail on how New York State is looking to procure offshore wind farms and transmission links, and the role the New York Green Bank can play in backing the industry in its early growth stages.

NYSERDA has rightly identified that one of the early challenges for growing a successful offshore wind sector is how to encourage investors to back projects that cost more up front than other clean energy projects; and where a supply chain is still in its infancy. This is why it is considering seven possible procurement options.

We won’t go into detail on all of these options here. They are set out in detail on pages 23 to 43 of that supporting paper.

But it is worth noting that the option NYSERDA is most positive about at this stage is called Index OREC [Ocean Renewable Energy Credit], which would be similar to the UK’s Contracts for Difference. It “draws on the renewables procurement structure introduced in the United Kingdom,” the document says.

Importantly, it is the only option in which NYSERDA sees no major downsides. This system offers limited implementation challenges; significant hedging benefits; low cost of finance; and benefits that would support local ratepayers. It isn’t a final decision, of course, but it is a good indication of the direction New York is going.

The options paper also looks at transmission. Again, it seems that New York favours a system where transmission links are developed in tandem with the wind farm, by the same firms. The developer could then hold onto the link and operate it; or could sell it on to a third-party operator, which would be similar to the UK’s Offshore Transmission Owner [OFTO] regime.

Finally, it said that the New York Green Bank could play a vital role in supporting the commercialisation of offshore wind. The parallel with the role played by the UK Green Investment Bank, now owned by Macquarie and called Green Investment Group, is clear. The NY Green Bank is in a great position to support projects on commercial terms while private rivals get comfortable with the risks of investing in this fledgling sector.

On the financial side, the UK GIB played an important role in the commercialisation of the offshore wind sector, and so it makes sense for New York – and the US more widely – to look at how offshore wind has been done in the UK. This doesn’t mean the UK’s approach is perfect, and we wouldn’t advocate slavishly following it. These things can always be challenged and improved upon.

That said, the approach has worked, and has helped the UK become the world’s biggest offshore wind market.

New statistics from WindEurope this week reinforced the UK’s leadership position. A record 3.1GW of offshore wind capacity was installed in European waters in 2017 across 17 wind farms, of which 1.7GW was in British waters. This put the UK ahead of Germany, where projects totalling under 1.3GW were completed in its waters.

This means there are 31 wind farms totalling 6.8GW in UK waters with a combined 1,753 turbines, which puts the UK ahead of Germany on 5.4GW in 23 projects with 1,169 turbines. Denmark, the Netherlands, Belgium and Sweden are the other European nations with over 100MW of offshore wind capacity installed.

And the UK could reach total offshore wind capacity of between 18GW and 30GW by 2030, with 14GW-20GW in German waters and 4.5GW-18.5GW in Dutch waters.

By contrast, Bloomberg New Energy Finance has estimated that the US will have 3GW-4GW of offshore wind farms in its waters by 2030. This reflects the challenges with getting procurement and transmission processes up and running; and building a reliable supply chain. The controversial Jones Act could also stifle development.

Still, we wouldn’t be surprised if that 4GW by 2030 figure is conservative. If the US is serious about offshore wind then we would expect it to grow strongly. There is no shortage of interest from major European offshore players such as Iberdrola, Orsted and Statoil; and major investors such as Copenhagen Infrastructure Partners.

Now states need plans that can capitalise on this interest – and, with New York’s masterplan, we can see that it is looking to build a strong base so it can procure 800MW of offshore wind farms in 2018 and 2019; and it plans to start its first request for tenders this year.

If it takes experience from London to help put this in place, so much the better – even if it means our colleagues this side of the Atlantic get a few bragging rights.

New York’s offshore wind masterplan shows that it is looking to follow lessons learnt in the UK. [Note: This is an extended and updated version of a Wind Watch article originally published in our weekly North American edition on 1st February 2018.]

We've recently released a complimentary ebook on North American wind: 5 Lessons on the North American Wind Business. Click here to download it.

160417 MHI Vestas Aerial-13430.jpg

New York or London: which is better? It’s a thorny debate that exercises some of those with a strong connection to either city. In reality, though, there is more to connect these two cities than divide them.

And, last week, it became clear that policymakers in New York are seeing what they can learn from their counterparts in London as they seek to grow in offshore wind.

You can’t have missed the announcement. Last Monday, New York Governor Andrew Cuomo launched a masterplan detailing how the state could support the construction of 2.4GW of offshore wind farms in its waters by 2030.

In the process, he wants to build an offshore wind industry in New York State that would generate investment of $6bn and support 5,000 jobs within the next ten years; and help the state to raise the proportion of electricity it gets from renewables to 50% by 2030.

Not to be outdone, New Jersey governor Phil Murphy last week signed an order to accelerate development of 3.5GW of wind farms in its waters by 2030.

And there are ambitious plans from other eastern US states too. Massachusetts has a goal for 1.6GW of offshore wind capacity; Maryland has committed to two projects of around 368MW; and Connecticut is looking for 200MW according to a request for proposals this week.

That means there are now 8GW of offshore wind farms planned off the east coast – and, with its detailed plan, New York is well-positioned to lead the way.

There is a lot of work that has gone into New York's plan. It is the result of two years’ research by New York State Energy Research & Development Authority, which has carried out 20 studies on the environmental, social and other impacts of its plan. And, crucially, it is looking at how best to procure and financially support schemes.

This is where New York’s policymakers are looking closely at their counterparts in London – or, more precisely, those in the UK civil service. It turns out NYSERDA is strongly considering pursuing a system of backing offshore wind farms that is similar to the UK’s.

That information is contained in a separate document, ‘Offshore Wind Policy Options Paper’, which runs to 117 pages and so, naturally, only select bits featured in the full masterplan.

However, it goes into a lot of interesting detail on how New York State is looking to procure offshore wind farms and transmission links, and the role the New York Green Bank can play in backing the industry in its early growth stages.

NYSERDA has rightly identified that one of the early challenges for growing a successful offshore wind sector is how to encourage investors to back projects that cost more up front than other clean energy projects; and where a supply chain is still in its infancy. This is why it is considering seven possible procurement options.

We won’t go into detail on all of these options here. They are set out in detail on pages 23 to 43 of that supporting paper.

But it is worth noting that the option NYSERDA is most positive about at this stage is called Index OREC [Ocean Renewable Energy Credit], which would be similar to the UK’s Contracts for Difference. It “draws on the renewables procurement structure introduced in the United Kingdom,” the document says.

Importantly, it is the only option in which NYSERDA sees no major downsides. This system offers limited implementation challenges; significant hedging benefits; low cost of finance; and benefits that would support local ratepayers. It isn’t a final decision, of course, but it is a good indication of the direction New York is going.

The options paper also looks at transmission. Again, it seems that New York favours a system where transmission links are developed in tandem with the wind farm, by the same firms. The developer could then hold onto the link and operate it; or could sell it on to a third-party operator, which would be similar to the UK’s Offshore Transmission Owner [OFTO] regime.

Finally, it said that the New York Green Bank could play a vital role in supporting the commercialisation of offshore wind. The parallel with the role played by the UK Green Investment Bank, now owned by Macquarie and called Green Investment Group, is clear. The NY Green Bank is in a great position to support projects on commercial terms while private rivals get comfortable with the risks of investing in this fledgling sector.

On the financial side, the UK GIB played an important role in the commercialisation of the offshore wind sector, and so it makes sense for New York – and the US more widely – to look at how offshore wind has been done in the UK. This doesn’t mean the UK’s approach is perfect, and we wouldn’t advocate slavishly following it. These things can always be challenged and improved upon.

That said, the approach has worked, and has helped the UK become the world’s biggest offshore wind market.

New statistics from WindEurope this week reinforced the UK’s leadership position. A record 3.1GW of offshore wind capacity was installed in European waters in 2017 across 17 wind farms, of which 1.7GW was in British waters. This put the UK ahead of Germany, where projects totalling under 1.3GW were completed in its waters.

This means there are 31 wind farms totalling 6.8GW in UK waters with a combined 1,753 turbines, which puts the UK ahead of Germany on 5.4GW in 23 projects with 1,169 turbines. Denmark, the Netherlands, Belgium and Sweden are the other European nations with over 100MW of offshore wind capacity installed.

And the UK could reach total offshore wind capacity of between 18GW and 30GW by 2030, with 14GW-20GW in German waters and 4.5GW-18.5GW in Dutch waters.

By contrast, Bloomberg New Energy Finance has estimated that the US will have 3GW-4GW of offshore wind farms in its waters by 2030. This reflects the challenges with getting procurement and transmission processes up and running; and building a reliable supply chain. The controversial Jones Act could also stifle development.

Still, we wouldn’t be surprised if that 4GW by 2030 figure is conservative. If the US is serious about offshore wind then we would expect it to grow strongly. There is no shortage of interest from major European offshore players such as Iberdrola, Orsted and Statoil; and major investors such as Copenhagen Infrastructure Partners.

Now states need plans that can capitalise on this interest – and, with New York’s masterplan, we can see that it is looking to build a strong base so it can procure 800MW of offshore wind farms in 2018 and 2019; and it plans to start its first request for tenders this year.

If it takes experience from London to help put this in place, so much the better – even if it means our colleagues this side of the Atlantic get a few bragging rights.

New York’s offshore wind masterplan shows that it is looking to follow lessons learnt in the UK. [Note: This is an extended and updated version of a Wind Watch article originally published in our weekly North American edition on 1st February 2018.]

We've recently released a complimentary ebook on North American wind: 5 Lessons on the North American Wind Business. Click here to download it.

160417 MHI Vestas Aerial-13430.jpg

New York or London: which is better? It’s a thorny debate that exercises some of those with a strong connection to either city. In reality, though, there is more to connect these two cities than divide them.

And, last week, it became clear that policymakers in New York are seeing what they can learn from their counterparts in London as they seek to grow in offshore wind.

You can’t have missed the announcement. Last Monday, New York Governor Andrew Cuomo launched a masterplan detailing how the state could support the construction of 2.4GW of offshore wind farms in its waters by 2030.

In the process, he wants to build an offshore wind industry in New York State that would generate investment of $6bn and support 5,000 jobs within the next ten years; and help the state to raise the proportion of electricity it gets from renewables to 50% by 2030.

Not to be outdone, New Jersey governor Phil Murphy last week signed an order to accelerate development of 3.5GW of wind farms in its waters by 2030.

And there are ambitious plans from other eastern US states too. Massachusetts has a goal for 1.6GW of offshore wind capacity; Maryland has committed to two projects of around 368MW; and Connecticut is looking for 200MW according to a request for proposals this week.

That means there are now 8GW of offshore wind farms planned off the east coast – and, with its detailed plan, New York is well-positioned to lead the way.

There is a lot of work that has gone into New York's plan. It is the result of two years’ research by New York State Energy Research & Development Authority, which has carried out 20 studies on the environmental, social and other impacts of its plan. And, crucially, it is looking at how best to procure and financially support schemes.

This is where New York’s policymakers are looking closely at their counterparts in London – or, more precisely, those in the UK civil service. It turns out NYSERDA is strongly considering pursuing a system of backing offshore wind farms that is similar to the UK’s.

That information is contained in a separate document, ‘Offshore Wind Policy Options Paper’, which runs to 117 pages and so, naturally, only select bits featured in the full masterplan.

However, it goes into a lot of interesting detail on how New York State is looking to procure offshore wind farms and transmission links, and the role the New York Green Bank can play in backing the industry in its early growth stages.

NYSERDA has rightly identified that one of the early challenges for growing a successful offshore wind sector is how to encourage investors to back projects that cost more up front than other clean energy projects; and where a supply chain is still in its infancy. This is why it is considering seven possible procurement options.

We won’t go into detail on all of these options here. They are set out in detail on pages 23 to 43 of that supporting paper.

But it is worth noting that the option NYSERDA is most positive about at this stage is called Index OREC [Ocean Renewable Energy Credit], which would be similar to the UK’s Contracts for Difference. It “draws on the renewables procurement structure introduced in the United Kingdom,” the document says.

Importantly, it is the only option in which NYSERDA sees no major downsides. This system offers limited implementation challenges; significant hedging benefits; low cost of finance; and benefits that would support local ratepayers. It isn’t a final decision, of course, but it is a good indication of the direction New York is going.

The options paper also looks at transmission. Again, it seems that New York favours a system where transmission links are developed in tandem with the wind farm, by the same firms. The developer could then hold onto the link and operate it; or could sell it on to a third-party operator, which would be similar to the UK’s Offshore Transmission Owner [OFTO] regime.

Finally, it said that the New York Green Bank could play a vital role in supporting the commercialisation of offshore wind. The parallel with the role played by the UK Green Investment Bank, now owned by Macquarie and called Green Investment Group, is clear. The NY Green Bank is in a great position to support projects on commercial terms while private rivals get comfortable with the risks of investing in this fledgling sector.

On the financial side, the UK GIB played an important role in the commercialisation of the offshore wind sector, and so it makes sense for New York – and the US more widely – to look at how offshore wind has been done in the UK. This doesn’t mean the UK’s approach is perfect, and we wouldn’t advocate slavishly following it. These things can always be challenged and improved upon.

That said, the approach has worked, and has helped the UK become the world’s biggest offshore wind market.

New statistics from WindEurope this week reinforced the UK’s leadership position. A record 3.1GW of offshore wind capacity was installed in European waters in 2017 across 17 wind farms, of which 1.7GW was in British waters. This put the UK ahead of Germany, where projects totalling under 1.3GW were completed in its waters.

This means there are 31 wind farms totalling 6.8GW in UK waters with a combined 1,753 turbines, which puts the UK ahead of Germany on 5.4GW in 23 projects with 1,169 turbines. Denmark, the Netherlands, Belgium and Sweden are the other European nations with over 100MW of offshore wind capacity installed.

And the UK could reach total offshore wind capacity of between 18GW and 30GW by 2030, with 14GW-20GW in German waters and 4.5GW-18.5GW in Dutch waters.

By contrast, Bloomberg New Energy Finance has estimated that the US will have 3GW-4GW of offshore wind farms in its waters by 2030. This reflects the challenges with getting procurement and transmission processes up and running; and building a reliable supply chain. The controversial Jones Act could also stifle development.

Still, we wouldn’t be surprised if that 4GW by 2030 figure is conservative. If the US is serious about offshore wind then we would expect it to grow strongly. There is no shortage of interest from major European offshore players such as Iberdrola, Orsted and Statoil; and major investors such as Copenhagen Infrastructure Partners.

Now states need plans that can capitalise on this interest – and, with New York’s masterplan, we can see that it is looking to build a strong base so it can procure 800MW of offshore wind farms in 2018 and 2019; and it plans to start its first request for tenders this year.

If it takes experience from London to help put this in place, so much the better – even if it means our colleagues this side of the Atlantic get a few bragging rights.

Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.

Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.